The Business Year

Xavier Joseph

UAE, DUBAI - Energy & Mining

Desalination costs decreased by 25% in UAE over past decade

CEO, Veolia Middle East

Bio

Now leading Veolia’s activities in the Middle East, Xavier Joesph previously served as Veolia Water COO for Veolia Water in the Middle East. He is an environmental engineer by background, with over 20 years of experience in the water industry acquired from both developing and developed countries. He arrived in Dubai in 2012 from Morocco where he had been Veolia Water Morocco Deputy Chief Executive Officer for four years. He is currentl on the boards of directors of several companies as a representative of Veolia in France, Qatar, Oman, and the UAE. His portfolio of achievements, in his past and present areas of responsibilities, includes, organization of project financing for water utilities, operations and maintenance projects for water treatment plants and water utilities, and the management of companies selling Veolia’s unique portfolio of water services. He was born in France in 1966 where he completed his bachelor’s and master’s degrees in engineering with specialization in electricity in the Ecole Nationale Supérieure des Ingénieurs Electriciens de Grenoble.

"This region is home to big industry actors that are public but act as private companies."

Considering the consolidation we have seen within the government over the past year, can we expect more activity in the PPP space in 2017?

The Veolia group strategy is to increase our market share in the industrial sector, by which I mean industrial players, and that classification does not necessarily differentiate between the public or private nature of our clients. This region is home to big industry actors that are public but act as private companies. From our global perspective, there is a willingness to increase the market share regarding industrial clients, but so far there has been a lot of statements but no concrete projects coming into our business lines. Within this space, the range of business models is wide but does not necessarily interest Veolia. Overall, this region is contemplating a lot of PPPs, so we will wait to see more strong opportunities. We are an operator and our core business is to operate facilities on which we can improve efficiency, train people, and transfer knowledge. We do not want to offset the investment of the government and take that onto our own books. We invest in technologies, we invest in the energy-saving sector, we invest in tools, and we invest in training centers, but investing to be the owner of a facility is no longer a part of our strategy.

How are your operations in the water market progressing?

One of the essential conditions for a company to stay afloat is to adapt to its market. The water market in the Middle East has become more competitive, and along with competition comes cheaper prices. I am not convinced that it is in the interest of a company like ours to try and compete against international companies that can offer far lower prices. The price of desalination in the UAE has decreased by 25% over the last 10 years and, if you integrate the inflation today when you bill one cubic meter of a desalination plant, you are paying 40% less than 10 years ago. The evolution of the technology on the market has allowed everybody to keep the margins steady with a 40% decrease in the unit price. In production, our expertise is in biomass electricity production. This is a way to produce electricity in which we can claim to be a leader and have cutting-edge technology. For a lot of reasons, I do not expect this region to have biomass plants for another 10 to 20 years, except in Turkey. In this region we are much more working on the demand side of energy, to help our clients decrease their consumption through monitoring, and there is a strong market in which our flagship is Enova, which is the regional energy savings leader. We have invested a lot in the energy savings sector, which is a must to be able to help clients decrease energy consumption.

On the desalination side, around 98% of the UAE’s water is produced through desalination. Veolia has claimed it has more efficient and cheaper ways to produce potable water. How can that be achieved?

The best example is the pilot that is co-funded by Masdar to ensure less than 3 Kwh per cubic meter of desalinated water, while the market is currently standing around 3.5kwh. Globally speaking this is the future of desalination. The UAE remains a big energy consumer so it is a problem of concept, as one cannot imagine desalination without energy. The challenge for tomorrow is to increase the efficiency and thereby decrease the price. The market is currently very low standing at USD 0.8 per cubic meter and on big units; I think you can reach USD 0.7.

How are you engaging with real estate developers at the design stage in order to generate greater savings on energy efficiency?

When we take on a pre-existing building then our knowledge allows us to commit to around 10% in savings. If we are involved at the design stage of the building then compared to a traditional building we can commit to a 30% saving, so it is absolutely clear that the next step of energy savings in this region is retro fitting for existing buildings and new building norms and mindsets for the buildings to come. There is proof that with an open mind we can finance retro fitting with a short-term payback; one day after the retro fitting starts, you already have savings that help with fewer carbon emissions.

Can you tell us about current biomass technology development within the company?

Veolia is able to produce electricity with any kind of biomass. In Morocco we are producing electricity with the remaining waste from olive leaf pulp and we are able to make electricity with that waste. In Japan we are making electricity with woodchip, so we have the technology, with any kind of green waste, to make electricity. The problem is that here there are not a lot of trees or forests and not a lot of green waste in the UAE, on which biomass is based.

Does anything in the carbon capture sector interest you?

There is a project to return used carbon to active carbon, an ongoing scheme in Paris, but it is still fairly underdeveloped. What is currently active in the Middle East, and we are submitting an offer to Dubai, is basic waste-to-energy, whereby you incinerate waste and produce electricity. There was an active project in the Northern Emirates, which has stopped, but will perhaps be re-launched. There is a lot of big projects in Kuwait and the first project in the region was in Abu Dhabi around 10 years ago. Someday there will be a new one but in the waste-to-energy sector, in which we are interested, we have 63 incinerators under operation worldwide. There are the same issues in this market, it is a very competitive market in which not one company can claim so many technological advantages to differentiate itself from the competition, which makes it difficult to be award

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